Sunland Company is planning to sell 1000 buckets and produce 980 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500 grams and employees of the company are paid $18 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Sunland has 200 kilos of plastic in beginning inventory and wants to have 300 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?

$8820

Explanation:

The total amount of budgeted direct labor for March will be calculated thus:

Production in March = 980

Estimated labor hour = 0.5hour

Labor rate per hour = $18

Total amount of budgeted labor hour will be:

= 980 × 0.5 × $18

= $8820

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